Russia Restores Full Eu Gas Supplies

Gazprom, the Russian gas monopoly, restored full natural gas supplies to Europe today as Ukrainian and Russian energy officials resumed talks over their pricing dispute.

Resumption of normal flows was reported by Hungary, Austria and Slovakia, among others, after Gazprom increased shipments through Ukraine, effectively easing a blockade on Russia's neighbour.

Russia's reputation as a reliable energy supplier has taken a battering as its row with Ukraine over gas prices affected supplies to the EU.

"With the aim of preventing a possible energy crisis, caused by Ukraine illegally taking gas, Gazprom has taken the decision to deliver additional gas into the gas transport system of Ukraine," the company said in a statement.

"We stress that the additional delivery of gas is not designed for Ukrainian consumers but is meant for transit through the territory for delivery to consumers outside the borders of Ukraine."

Gazprom halted gas deliveries to Ukraine on Sunday after Kiev refused to pay a fourfold price increase.

The state-controlled company said then that supplies to its other European customers - about 80% of which goes through pipelines crossing Ukraine - would be unaffected, but within hours of the shutoff, other countries began reporting a shortage.

Russia has accused Ukraine of stealing gas at a rate of 95 million cubic metres a day. Kiev denied the charge and said that the reduced supplies had cut pressure and led to shortages.

Ukraine says it does not oppose the case for higher gas prices in line with market conditions, but has called for a phased increase from $50 (£28.87) to $230 per 1,000 cubic metres to avoid severe economic disruption to its energy-dependent industries.

Kiev has also said it would siphon off supplies if temperatures fall below freezing. European states have called on both countries to sort out their dispute quickly, while the US warned Moscow against using energy as a political tool.

Moscow has promoted itself since Soviet times as a reliable gas supplier - an image it seeks to enhance as chairman of the G8 - but events in the past 36 hours have tarnished damaged Russia's reputation, adding to the concerns sparked by the Kremlin takeover of the Yukos energy giant.

Germany, Russia's biggest gas customer, said that it would think twice about increasing its imports of Russian gas unless Moscow proved it was a dependable supplier. About one-quarter of Europe's gas comes from Russia.

Relations between Moscow and Kiev have deteriorated since west-leaning Viktor Yushchenko became president in Ukraine's "orange revolution" last year, defeating the Kremlin's favoured candidate.

Ukraine, which is seeking membership of the EU and Nato, has accused Russia of using energy as a political tool to show displeasure at its western-orientated foreign policy.